During the recent financial crisis many workers lost their jobs. Amy, for example, lost her job as a pharmaceutical salesperson. After five months of unemployment she spent $6,000 on a class that taught her the skills she would need to sell medical devices. Today Amy makes 25%more than she did in pharmaceutical sales and enjoys her new job much more than her old job. Which of the following concepts best illustrates this scenario?

Question

Quizplus · Accepted Answer

The scenario described in the question is an example of trade re-allocating jobs across industries. Amy lost her job in the pharmaceutical industry but was able to gain new skills and find employment in the medical device industry, where she is now making more money and enjoys her job more. This is a positive outcome of trade, as it allows for the re-allocation of labor to where it is most productive and in demand.

During the Recent Financial Crisis Many Workers Lost Their Jobs